As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the medical devices & supplies - cardiology, neurology, vascular industry, including Artivion (NYSE: AORT) and its peers.
The medical devices and supplies industry, particularly in the fields of cardiology, neurology, and vascular care, benefits from a business model that balances innovation with relatively predictable revenue streams. These companies focus on developing life-saving devices such as stents, pacemakers, neurostimulation implants, and vascular access tools, which address critical and often chronic conditions. The recurring need for these devices, coupled with growing global demand for advanced treatments, provides stability and opportunities for long-term growth. However, the industry faces hurdles such as high research and development costs, rigorous regulatory approval processes, and reliance on reimbursement from healthcare systems, which can exert downward pressure on pricing. Looking ahead, the industry is positioned to benefit from tailwinds such as aging populations (which tend to have higher rates of disease) and technological advancements like minimally invasive procedures and connected devices that improve patient monitoring and outcomes. Innovations in robotic-assisted surgery and AI-driven diagnostics are also expected to accelerate adoption and expand treatment capabilities. However, potential headwinds include pricing pressures stemming from value-based care models and continued complexity changing from navigating regulatory frameworks that may prioritize further lowering healthcare costs.
The 4 medical devices & supplies - cardiology, neurology, vascular stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.2%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.4% since the latest earnings results.
Weakest Q4: Artivion (NYSE: AORT)
Formerly known as CryoLife until its 2022 rebranding, Artivion (NYSE: AORT) develops and manufactures medical devices and preserves human tissues used in cardiac and vascular surgical procedures for patients with aortic disease.
Artivion reported revenues of $97.31 million, up 3.9% year on year. This print fell short of analysts’ expectations by 3.8%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates and a slight miss of analysts’ sales volume estimates.
"2024 was an excellent year for Artivion, marked by robust revenue and adjusted EBITDA growth, which enabled us to deliver positive free cash flow while making significant strides in key clinical and regulatory initiatives. Revenue growth in the fourth quarter was driven by year-over-year growth in On-X of 10%, stent grafts of 10%, and BioGlue of 8% all compared to the fourth quarter of 2023. On a constant currency basis, year-over-year, On-X, stent grafts, and BioGlue grew 10%, 8%, and 7%, respectively. We also saw continued revenue strength in Latin America which grew 26% both in the fourth quarter and for the full year 2024 on a constant currency basis compared to last year." said Pat Mackin, Chairman, President, and Chief Executive Officer.
Artivion delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 15.4% since reporting and currently trades at $23.59.
Read our full report on Artivion here, it’s free.
Best Q4: ICU Medical (NASDAQ: ICUI)
Founded in 1984 and named for its initial focus on intensive care units, ICU Medical (NASDAQ: ICUI) develops and manufactures medical products for infusion therapy, vascular access, and vital care applications used in hospitals and other healthcare settings.
ICU Medical reported revenues of $621.6 million, up 5.7% year on year, outperforming analysts’ expectations by 6.2%. The business had a strong quarter with an impressive beat of analysts’ EPS estimates and full-year EBITDA guidance slightly topping analysts’ expectations.
ICU Medical pulled off the biggest analyst estimates beat among its peers. The market seems unhappy with the results as the stock is down 5.7% since reporting. It currently trades at $141.04.
Is now the time to buy ICU Medical? Access our full analysis of the earnings results here, it’s free.
Merit Medical Systems (NASDAQ: MMSI)
Founded in 1987 and now offering over 1,700 patented products across global markets, Merit Medical Systems (NASDAQ: MMSI) manufactures and markets specialized medical devices used in minimally invasive procedures for cardiology, radiology, oncology, critical care, and endoscopy.
Merit Medical Systems reported revenues of $355.2 million, up 9.4% year on year, exceeding analysts’ expectations by 1%. Still, it was a mixed quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
As expected, the stock is down 8.3% since the results and currently trades at $93.54.
Read our full analysis of Merit Medical Systems’s results here.
Penumbra (NYSE: PEN)
Founded in 2004 to address challenging medical conditions with significant unmet needs, Penumbra (NYSE: PEN) develops and manufactures innovative medical devices for treating vascular diseases and providing immersive healthcare rehabilitation solutions.
Penumbra reported revenues of $315.5 million, up 10.8% year on year. This print beat analysts’ expectations by 1.2%. More broadly, it was a satisfactory quarter as it also recorded a decent beat of analysts’ EPS estimates but full-year revenue guidance slightly missing analysts’ expectations.
Penumbra pulled off the fastest revenue growth but had the weakest full-year guidance update among its peers. The stock is flat since reporting and currently trades at $270.27.
Read our full, actionable report on Penumbra here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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